6 tips for finding the best savings accounts

Interest rates on savings accounts may go up and down, but one constant is the a range of different rates to be had. Inevitably, some people end up on the low end of that range, but you can take steps to make sure you stay near the higher end. Beyond that, there is more to determining the best savings accounts than just comparing rates. Read through the following 6 tips and become more savings savvy.

1. Shop online

There are thousands of banks out there, but online resources make it easy to compare rates to find the best savings accounts. While you are at it, you might also consider money market accounts; these are similar in nature to savings accounts, but on average, carry slightly higher interest rates.

Doing a comprehensive search may help identify banks you are not already familiar with, such as online banks. These often offer higher interest rates, and may be especially appropriate for a savings account which doesn't require that you have much regular interaction with the bank.

In the end, there are other factors in choosing a bank besides rates, so don't just pick the top rate you find, but use a comparison of rates to put together a short list of banks for further consideration.

2. Set aside teaser rates

When you are comparing rates, make sure you focus on the ongoing account rate a bank is offering, and not on a special introductory or "teaser" rate the bank may have. A teaser rate might be a nice extra bonus when all else is considered, but because these rates are short-lived, they should not be the driving factor in choosing a savings account.

3. Determine the impact of size

At some banks, larger deposits may make you eligible for special rates on certain products. Find out if the banks you are considering have any such special offers. Doing so may help you decide whether to add something extra to your deposit to reach a higher rate tier.

4. Evaluate related services

It may be that a savings account is all you are looking for from a bank, but some people want the convenience of having checking and savings at the same bank, or the potential of cultivating a credit relationship.

If you have other services you want, you'll need to evaluate these alongside the merits of the savings accounts different banks offer to determine the right bank for your overall needs. In some cases, banks may offer higher rates on deposit products if you have a broader relationship with the bank, so the scope of your account needs may affect the rates you can get.

5. Confirm FDIC insurance coverage

Before you sign up for an account, you should confirm that the bank is covered by FDIC insurance, and that your deposits will fall within the $250,000 FDIC insurance limit. You may be able to have more insured at one institution, depending on the structure of your accounts (i.e. joint accounts and IRAs may be eligible for additional coverage). Also, be aware that multiple accounts under the same name at a single institution will count collectively toward the coverage limit.

6. Negotiate the best deal

Finally, when you think you've identified a promising bank, it never hurts to ask directly whether you can get a better rate, even if it's only by a very small amount. If you are bringing a large deposit and/or multiple accounts, this may pay off.

Once you've found the right account, don't assume that you are completely done shopping. You should periodically go through this process again to make sure that your account stays as competitive as it was when you first chose it.

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